Investor confidence in the financial markets is slowly improving, as a report showed equity mutual fund flows for June hit their highest level in more than a year.

Investors added an estimated $19.5 billion to equity funds last month, representing the largest monthly inflow since the nearly $29 billion inflow in March 2002, according to Lipper. Still, the buying was not overly optimistic as the types of funds chosen for investment reflected "broad underlying caution."

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